Smart Business: Outsourcing and Electrical Contractors By: Mike Widner, Director Strategy Construction Company
Outsource: To send out (work, for example) to an outside provider or manufacturer in order to cut costs.
What Function Does My Company Have to Outsource?
Let us answer the question with a series of questions: What did you do with the extra help you hired to complete your last large project? Where did they come from when you needed them? How much time did you spend on running ads, interviewing, hiring, training, paying and then laying them off? What about those who were injured and continue on your payroll? Garnishments, unemployment claims and all other things under the sun? Do you know the true cost costs associated with all of these time consuming tasks?
Many electrical contractors are finding that their time is too valuable to deal with constant insurance, payroll and human resource problems. They want more time to focus on the money making side of electrical contracting. Securing electricians through a reputable staffing company is catching on because it offers great flexibility and containment of overall human resource costs. Essentially, a staffing company becomes your human resources department your “outsourced” function. If you fill a certain percentage of positions with temporary electricians, you not only receive the benefits of an instant workforce, but you also have the option to reduce staff without affecting your permanent crew.
Reduce Hiring Pitfalls
How many electricians hired by busy owners are thoroughly screened and vetted? On-the-fly hiring can bite you in the end. The chances of success can be far greater if the hiring process is performed by an outsourced office devoted solely to interviewing and hiring electricians. The staffing company, rather than your firm, assumes responsibility for the otherwise time-intensive and expensive process of advertising, phone calls, recruiting, application processing, checking references, checking qualifications, criminal history, DMV records, interviewing, and recommending placement. The staffing company can tap into an already established database of qualified, skilled, and screened electricians that result in a speedy fill for a job that it might take the busy owner weeks to fill. In the end, a staffing service can take much of the randomness and pain out of the in-house hiring process.
Electrical contractors, specifically those with minimal office and staff support, may not have adequate time to attract, screen and assess qualifications, background and work history of electricians. In contrast, most staffing companies have a time invested and well-developed rapport with the electricians that are recommended for placement to a given job site. This includes full understanding of their skill, past performance level and facilitates the probability of a more successful and faster placement. In addition, turnaround time between a request and arrival of help at the job site is much faster. Longer lead times allow a more skill selective process to occur and should be considered in planning. Many electrical contractors also enjoy the benefits of hiring temporary electricians for positions that will ultimately become permanent. They can evaluate the electrician before making a commitment to hire full-time.
Wave Goodbye to the Agony of Administration
Since the staffing company, not the client electrical contractor is the employer - i.e., the employer of record - functions like payroll, tax withholding, Social Security, Worker’s Compensation and Unemployment Insurance deductions, health insurance, and other benefits, if any, are handled. The staffing company also prepares required tax reports, distributes W-2s to electricians, and does all the other paper-shuffling tasks imposed on employers by government. Temporary electricians are a mobile add-in rather than a component of permanent overhead, which also eliminates unpleasant and often demoralizing layoffs. This eliminates unemployment compensation payments the electrical contractor would otherwise have to process. In our cyclical industry, this is a big plus!
Minimize Legal Exposure
Ever-increasing regulatory oversight (i.e. DOL, NLRB, State/Local authorities, et. al.) and exposure to various forms of legal liability, hiring and firing can often become a serious drag on employers. Attracting the wrong electricians can be an expensive mistake, given the high cost of acquiring and training new electricians and the increasing likelihood of a lawsuit for discrimination, wrongful discharge, dealing with fraudulent workers’ comp claims and all the other imaginable legal tangles.
Even though the employment at-will doctrine prevails in the private sector, a succession of wrongful discharge lawsuits and the resulting encroachment on an employer\'s dismissal rights have made bringing full-time and/or permanent employees onboard far less attractive than it once was. Since temporary electricians have no direct employment relationship with the client electrical contractor, for all practical purposes, the likelihood of reduced employment-related litigation is present. To clarify the inference “reduced likelihood of litigation”, the client electrical contractor using temporary electricians is not completely “out of the woods”.
In some instances, federal or state government agencies or courts have leveled charges of “joint employment” against the client, resulting in the assessment of back taxes and the sharing of other legal obligations and penalties. These are extreme circumstances and remind everyone to treat all employees, temporary and permanent with consistency.
Time is Money!
The major advantage of using a staffing company is the free time the electrical contractor can use to concentrate on the money making part of the business and less time on consuming administration. If it happens that a temporary electrician\'s skills prove incompatible with the job, it is usually a simple matter to ask the staffing company to reassign that person and find a suitable replacement. Keep in mind, too, that you only have to pay for hours actually worked (no holidays or other costs of absenteeism).
On a productivity level, temporary electricians, in some cases, prove to be more productive than full-time employees are. Generally temps spend less time socializing and are far less concerned with company politics. In addition, when using a staffing service, you can better manage project management goals, materials ordering, interfacing with your supervisors and still have time for other contingencies during busy weeks, without having to pay overtime to your core employees. No need to juggle with the hiring and firing paperwork anymore. Now, with one phone call, your solution is provided.
Web Section: Articles Form
Company Name: Strategy Construction Company
Website: http://www.strategy-construction.com
Author: Mike Widner
Address: 5971 Omaha Blvd
City: Colorado Springs
State: CO
Zip: 80915 |
